Let's consult! HMRC's summer feedback pack

In a consultative frenzy, HMRC this week issued eight separate documents setting out its proposals for new rules and reforms ranging from PAYE to pensions tax, controlled foreign company rules, travel & subsistence and furnished holiday lettings rules.

Many of the consultations pick up loose ends from Labour’s March Budget, or put forward new ideas such as PAYE reform and simplifying associated company rules around the small profits rate of corporation tax that were mooted in the coalition government’s June Budget.

This article sets out a brief overview of the topics under consideration, which will be examined in more detail in separate articles. Follow the links below to see the full consultation documents and further commentary on AccountingWEB.co.uk

In a consultative frenzy, HMRC this week issued eight separate documents setting out its proposals for new rules and reforms ranging from PAYE to pensions tax, controlled foreign company rules, travel & subsistence and furnished holiday lettings rules.

Many of the consultations pick up loose ends from Labour’s March Budget, or put forward new ideas such as PAYE reform and simplifying associated company rules around the small profits rate of corporation tax that were mooted in the coalition government’s June Budget.

This article sets out a brief overview of the topics under consideration, which will be examined in more detail in separate articles. Follow the links below to see the full consultation documents and further commentary on AccountingWEB.co.uk.

  • Improving the operation of PAYE
    The consultation paper on improving the operation of Pay As You Earn (PAYE) seeks views on using real time information to simplify the system and reduce burdens on business.
     
  • Furnished holiday lettings
    Following election-time shenanigans, the government plans to increase the minimum periods for holiday properties qualifying for relief.
     
  • Pensions tax relief
    The new coalition government is considering a new approach involving the reform of existing allowances, including a significantly reduced annual allowance in the region of £30,000-£45,000
  • Associated company rules
    New draft legislation sets down that rights are only attributable between associated individuals where “substantial commercial interdependence” exists between the relevant companies.
  • Inheritance tax avoidance schemes
    New IHT Description Regulations will set out trust arrangements that would have to be notified under the extended Disclosure of Tax Avoidance Schemes (DOTAS) regime.
  • Taxation of foreign branches
    The first of two consultations on Corporation Tax issues reforms to enhance the competitiveness of companies operating in the UK and abroad through more territorial tax arrangements.
  • Controlled Foreign Companies interim improvements
    Part two of the Corporation Tax consulation covers interim reforms ahead of a more detailed reform of CFC rules planned for the spring of 2012. Look out for an event on the changes in September.
     
  • Modernisation of Investment Trust Company (ITC) rules
    More reforms are planned to allow for wider investment strategies and reduce administrative burdens, without creating opportunities for unintended tax advantages.
  • National Minimum Wage: travel and subsistence schemes
     NMW regulations will be changed so that travel and subsistence expenses to temporary work places that are allowable for tax and NICs purposes are not considered part of the wage calculation.

Continued...

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Comments
Wild Billy's picture

How many here will contribute to these consultations?

Wild Billy | | Permalink

Anyone taking the time to respond? Just wondering.

And I'm pretty sure that the description of the associated company rules document is (very) wrong.

John Stokdyk's picture

Let me know where errors are and I'll fix them

John Stokdyk | | Permalink

Two points, Billy:

1. Where we have posted detailed articles on the consultations (PAYE reforms and Pensions Tax Relief are up now, others will follow in the next week), we have invited AccountingWEB.co.uk members to  post comments on the site and we'll compile & forward them to HMRC by the various deadline dates.

2. Please let me know where I've gone wrong with the associated companies summary. I have reviewed what I've put and the document it's based on and not found any terrible mistatements (most of which are taken pretty directly from the text). Please note that there are two documents on the Treasury consultation page. I picked up most of the info published here from the second one, summarising the government's plans following the previous submissions. Apologies in advance for any mistakes, but I was having to move at some speed to try and digest all of the eight consultations, so some lapses may have occured.

Wild Billy's picture

Last part seems mixed up to me

Wild Billy | | Permalink

 ...nevertheless, the government is still interested in hearing, among other things, whether the new test will establish whether companies form an economic whole that should be taxed collectively for CT. The deadline for responses is 22 January 2010.
 

The Next Steps chapter suggests they are taking technical comments on the re-proposed draft legislation and draft guidance. I'm not clear there is any reference to reopening the consultation to look at "whether the new test will establish whether companies form an economic whole that should be taxed collectively for CT".

And the last sentence is obviously wrong. That is the date for the previous consultation. Not sure there is a date for comments on the legislation.

 

 

John Stokdyk's picture

Thanks for policing this

John Stokdyk | | Permalink

For the sake of clarity, I've removed the end statement, which was drawn from the summary of the original consultation document. I was trying to put the whole exercise into context, which the Treasury said was aimed at getting "a more targeted test to establish those companies that form an economic whole and thus whose profits should be considered collectively in establishing the rate of corporation tax that applies to them".

Sorry to any readers for any confusion caused. We will aim to tidy it up with a more detailed and careful precis of the consultation document in the next week or so.

Wild Billy

chatman | | Permalink

Good to see HMRC contributing busily to the forum today. Makes for a much more balanced debate.

Open sourcing replies

James Spencer | | Permalink

 Have you thought of doing one of the responses in a wiki format to see if that will get to some sort of consensus?  It could be an interesting way to see if responses could be produced more quickly.

John Stokdyk's picture

Interesting suggestion...

John Stokdyk | | Permalink

A wiki would certainly save the editorial team some work.

While it pains me to admit to some control-freakery urges, I do worry about the potential for subterfuge and manipulation. If someone had a real bee in their bonnet about proposals, they could keep coming back and changing/reinstating the position they wanted to advance.

By letting all the comments come in as usual and then categorising & compiling them into an accurate summary of the views expressed, we will be able to forward HMRC a document that we feel reflects the community's true feelings.

I mentioned that it would make some extra work for us to compile such documents, but we think they might also make interesting reading for members and provide a useful record of how much attention has been paid to our views when the measures are ultimately introduced.

Finally, we'd need to look around to find a suitable wiki module to plug into the site. I'm sure there's one out there, but it's something our technical team hasn't tackled yet. I'll use this as an opportunity to enquire about this, since there might be other areas (eg technical content on financial reporting standards etc) where the wiki approach would be very suitable.

Thanks for putting forward such an interesting idea.

Wikis and such

James Spencer | | Permalink

 Thank you very much for that considered reply.  I would certainly look into whether there is anything similar going on elsewhere.  I must admit that I'm not aware of much (there's something on the government's Great Repeal Bill which I found, but I'm not sure how that works).  Perhaps that's a question for Any Answers?